Commercial Property Insurance: Protecting Your Workspace

Commercial property insurance is a must-have for most businesses. Not only does it protect you in case of accidents involving customers on your premises, it also can protect you from damages occuring to your building as a result of fire, theft, or natural disaster, depending on the provisions of your policy.

Types of Protection Available

There are several provisions you can include in your commercial property coverage.

  • Building Coverage - If you own the building in which your business is housed, you should have coverage for the building. If you lease or rent space, it is possible that the owner provides adequate building coverage, but you should check with the owner to be sure. Some owners will require you to provide building coverage in order to rent or lease the property.
  • Business Property - This coverage insures all of the equipment in your business (except automobiles, which are covered under a commercial auto policy). Coverage can be extended to cover furniture and equipment as well as improvements you make to the building (such as better access for the disabled).
  • Loss of Income - You can purchase coverage to protect you in case your business is affected by a covered event and you are unable to generate income for a specified period of time.
  • Natural Disaster - You can obtain coverage to protect your building and business property against earthquake, flood, and fire.

The Importance of Property Insurance

Obtaining the right commercial property insurance buys you more than just peace of mind. It can also be part of your overall risk mitigation approach in your business plan and management strategy. If you don't have the right coverage and an incident occurs, the financial devastation may be enough to put you out of business. When compared to the relatively small burden of property insurance, the potential risk of not having the insurance far outweighs the cost of having it and not using it.

To determine your insurance needs, you should understand how much it would cost for you to relocate your business in the case of an earthquake, fire, or flood. How quickly would you be able to set up your business and begin generating income? How much would it cost you to be closed for a specific period of time? What kind of ramifications would your customers experience if you were unable to remain open?

Updating Existing Policies

If you have property insurance, how often do you update your policy to reflect new equipment purchases and coverage needs?  You should be reviewing your policy at least once per year to ensure that the policy still adequately meets the needs of your business. The more your business grows, the more coverage you may need to protect your business.


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